WHICH OF FOLLOWING IS TRUE ABOUT QUALIFYING BUSINESS INCOME (QBI) DEDUCTION FOR TAXPAYERS WITH TAXABLE INCOME...

WHICH OF FOLLOWING IS TRUE ABOUT QUALIFYING BUSINESS INCOME (QBI) DEDUCTION FOR TAXPAYERS WITH TAXABLE INCOME ABOVE THE TAXABLE INCOME LIMITATIONS?

A. IF THE TAXPAYER IS A SPECIFIED SERVICE TRADE OR BUSINESS (SSTB), NO DEDUCTION IS ALLOWED.

B. IF THE TAXPAYER IS A QUALIFIED TRADE OR BUSINESS (QTB), W-2 WAGE AND PROPERTY LIMITATIONS DO NOT APPLY.

C. IF THE TAXPAYER IS A QUALIFIED TRADE OR BUSINESS (QTB), W-2 WAGE AND PROPERTY LIMITATIONS ARE PHASED IN.

D. IF THE TAXPAYER IS A SPECIFIED SERVICE TRADE OR BUSINESS (SSTB), W-2 WAGE AND PROPERTY LIMITATIONS APPLY.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Taxpayers are allowed a deduction up to 20% of the qualified business income (QBI). QBI includes...

Taxpayers are allowed a deduction up to 20% of the qualified business income (QBI). QBI includes business income from sole proprietorships (Schedule C) and flow-through entities such as partnerships, limited liability companies, S corporations, trusts, and estates. Is this deduction the same as "Itemized deduction", and do you feel C Corporations should quality for this deduction.

Determine whether the following taxpayers are eligible for the QBI deduction and the deduction amount (if...

Determine whether the following taxpayers are eligible for the QBI deduction and the deduction amount (if any). Cathy is married and files a joint return with her spouse. Cathy operates a small family restaurant as a sole proprietor. She pays wages of $70,000 and the QBI from the restaurant is $100,000. Cathy’s spouse has wages of $250,000 and their joint taxable income is $364,000. Is Cathy eligible for QBI deduction? Answer yes or no If eligible, how much is the...

2. Which is NOT true of the QBI-Qualified Business Income Deduction? Caution: read all answers before...

2. Which is NOT true of the QBI-Qualified Business Income Deduction? Caution: read all answers before you choose. a. The QBI is 20% b. The QBI doesn't reduce self-employment tax c. The QBI doesn't reduce adjusted gross income d. If married people, make more than $315,000 or single people make more than $157,500 there are many limitations on this deduction e. The QBI can be used for sole proprietorships (schedule C), partnerships, or Sub S corporations. f. All of the...

Thad, a single taxpayer, reports taxable income before the QBI deduction of $195,500. Thad, a CPA,...

Thad, a single taxpayer, reports taxable income before the QBI deduction of $195,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During the tax year, his proprietorship generates qualified business income of $156,400 after deducting self-employment taxes, W–2 wages of $117,300, and $10,000 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places. Round your final...

Part1 Margen is single and has taxable income before the QBI deduction of $173,300. Margen owns...

Part1 Margen is single and has taxable income before the QBI deduction of $173,300. Margen owns a sole proprietorship (not a professional service) that produced net ordinary income of $180,000 and subject to self-employment tax of $21,300. The business paid total W-2 wages of $74,000 and the total unadjusted basis of property held by the business is $120,000. How much is Margen’s QBI deduction? Part2 a. Mourezky gave some long-term real estate to a church. The property was worth $33,000...

Describe the purpose behind the Qualified Business Income deduction and which taxpayers it is available to.

With regard to the limitations of the QBI deduction, which of the following statements is not...

With regard to the limitations of the QBI deduction, which of the following statements is not true? 1) There are two potential limitations on the QBI deduction once a taxpayer's taxable income reaches certain levels. 2) There is no limitation on the QBI deduction besides the 20% rule. 3) The W-2 Wages/Capital Investment Limit can limit the QBI deduction to the greater of 50% of QBT W-2 wages or 25% of QT W-2 wages plus 2.5% of the acquisition basis...

Calculate the taxpayer's 2019 qualifying business income deduction for a qualified trade or business: Filing Status:...

Calculate the taxpayer's 2019 qualifying business income deduction for a qualified trade or business: Filing Status: Single Taxable Income: $180,000 W-2 Wages: $20,000 Net Capital Gain: $0 Qualified Business Income: $80,000

McKenzie purchased qualifying equipment for his business that cost $457,900 in 2019. The taxable income of...

McKenzie purchased qualifying equipment for his business that cost $457,900 in 2019. The taxable income of the business for the year is $111,500 before consideration of any § 179 deductions. If an amount is zero, enter "0". a. Calculate McKenzie’s § 179 expense deduction for 2019 and any carryover to 2020. § 179 expense deduction for 2019: $ _________ § 179 carryover to 2020: $ _________ b. How would your answer change if McKenzie decided to use additional first-year (bonus)...

For his business, McKenzie purchased qualifying equipment that cost $212,000 in 2018. The taxable income of...

For his business, McKenzie purchased qualifying equipment that cost $212,000 in 2018. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment? McKenzie's § 179 expense deduction is $ for 2018. His § 179 carryover to 2019 is $

Subjects